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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 14724 / November 21, 1995
SEC v. Jerome E. Pinckney, Richard L. Arnold, Donald E. Elder,
Fernando Cruz, Shaun K.R.
Maxwell, Anthony Bukovich, Jr., and Six
Capital
Corporation, Civil Action No. 7:95-CV-122-BR(1)
(E.D.N.C.)
On
November 6, 1995, Judge W. Earl Britt of the United
States
District Court for the Eastern District of North
Carolina
entered preliminary injunctions against Fernando Cruz,
a certified financial planner
in New Jersey, and Donald E. Elder of
South
Carolina, in connection with offers of fictitious
prime bank instruments in two different schemes.
The court also enjoined Shaun K.R. Maxwell of Auburn, Washington who consented
to the injunction without
admitting or denying the SEC's
allegations.
The preliminary injunctions prohibit violation
of Section
17(a) of the Securities Act of 1933.
In addition,
Maxwell was ordered to provide
an accounting.
The court declined
to enter preliminary injunctions
against Jerome E. Pinckney and
Richard L. Arnold, both of North Carolina, and Anthony Bukovich
and Six Capital Corporation of Florida.
The
complaint alleges that from April 1994 to September
1994, the defendants defrauded investors by making numerous
misrepresentations and omissions of material fact in
connection
with
the offer of two investment contracts based on
the purchase
and sale of "prime bank securities."
The complaint alleges that
the first offer promised investors a 9% weekly return,
guaranteed
by
a top five United States bank or trust, and required
a $10 million minimum investment which would remain 100% safe
in the
investors'
bank account.
The complaint further alleges that
several
defendants offered a second prime bank investment requiring an $870,000 minimum investment which was purportedly
to be
used to purchase and sell discounted, $1 million
guarantees
issued by the top fifteen banks in western Europe.
The second
offer, which was interrupted by the SEC's investigation,
promised
that
the bank guarantees would be resold to a major
U.S. brokerage firm for no less than $925,000.
In both schemes,
investors were asked to execute a Limited Power of Attorney
providing access to their
funds.
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